Middleborough-based Mayflower Bancorp Inc., parent company of Mayflower Bank, released its first quarter – yes, first quarter – earnings July 18. And if you think the timing is weird, that was after the bank changed the end of its fiscal year from April 30 to March 31.

So, when pretty much every other stock bank is reporting second quarter earnings, Mayflower is wrapping up its first quarter. For those of you keeping score at home, that makes Mayflower’s first quarter April 1 through June 30.

And if you’d like to know why Mayflower, a small, $250 million bank, is part of the oddball-earnings-periods club – well, good luck. 

Last year, the Federal Deposit Insurance Corp. made the bank switch to something that at least sort of lines up with its call report filings, but why does the bank not end its quarters in March, June, September and December like almost everyone else? Nobody knows.

Repetitious, Redundant, Expensive

“We converted from mutual (to stock) in December 1987,” Edward Pratt, the bank’s president and CEO, told Banker & Tradesman. “Since then we have gone merrily along our way filing our call reports on a calendar basis.”

“For reasons I’m unable to explain, the bank’s fiscal quarters do not line up with the calendar year,” Pratt continued. The bank filed its call reports with the FDIC based on the calendar year, but released its earnings to the public in April, July, October and January.

A year ago, when the FDIC told Mayflower that its April 30 fiscal year-end was messing with the regulator’s loan loss reserve reporting, the bank found complying with the FDIC’s wishes without making a change to the bank’s fiscal year-end made for a lot of extra work.

“We were spending two months out of every three analyzing our portfolio,” Pratt said. “It was a repetitious, redundant exercise and it was expensive.”

By changing to a fiscal year that ends on the last day of December, March, June or September, the bank could go back to analyzing its loan portfolio four times each year rather than eight.

But why did it choose March?

Pratt acknowledged that “even at 3/31, we’re in the minority.” But he said the bank gets a better price on accounting services by ending its fiscal year in March rather than during the mad rush of December.

And it may just be that weird dates are just a holdover from the industry’s slightly more parochial days.

“What I recall is that April 30 was typically the year-end for banks in Massachusetts that have a cooperative bank charter, which is what Mayflower has,” said Steve Coukos, a banking attorney and general counsel at Cambridge Savings Bank. “As a publicly traded stock, Mayflower may have felt that a March 31 year-end is better from an investor relations perspective.” 

‘Insanely Favorable’

And as for its actual earnings, Mayflower is pretty much in the same boat as other banks its size.

Its first quarter profit was $389,000, compared to $359,000 in the same period a year ago.

Net interest income was down, non-interest income was up, but so was non-interest expense. It’s return on average assets was 0.61 percent and its net interest margin was 3.53 percent.

The bank is helped by the fact that it has virtually no bad business on its books.

Its provision for loan losses was $10,000 during the quarter, compared to $57,000 a year ago. Non-performing assets were flat at $561,000. Its allowance for loan losses is 334.9 percent of its non-performing loans.

“We have no large chunks of non-performing assets or home loans in foreclosure,” Pratt said. “The economy is not good, and loan demand is not what we would like it to be. The loan demand that is there is because loans are at insanely favorable terms.”

The bank’s first quarter profit represents an 8.4 percent increase over a year ago, “but very few of our costs are declining,” Pratt said.

The industry’s conventional wisdom says a bank Mayflower’s size is probably looking for a larger bank to acquire it, or that larger banks have at least been fiduciarily flirtatious.

But Pratt said nothing Mayflower’s board has seen in recent years has inspired it to make a deal.

“There have been folks interested in us, and situations we’ve been interested in, but the board hasn’t thought any of those were in the best interest of our shareholders,” Pratt said.